MegaChem Limited

Management Online Q&A With Investors & Stakeholders

Dear Investors & Stakeholders,

Thank you very much for your questions and the opportunities to respond to them.

We hope you have a better understanding of our business through this online exchange.

Your questions are reposted in blue followed by our replies in black.

Best Regards,
The Management Team
MegaChem Limited

1. Dear Lester Yeo, you wrote:

Do you plan to reduce your debt with your cash holdings to reduce borrowing cost?

We have to be financially disciplined especially in times of economic uncertainty. Hence the Group has maintained an optimal capital structure such that our debt financing is at a comfortable level. Any cash surplus beyond our requirements of working capital, capital expenditure and financial commitments will be used to reduce bank borrowings and consequently our finance expenses.

2. Dear Peter Tang, you wrote:

Only sales from Europe is growing H1 2019 vs H2 2018, where is the strength coming from when the rest of the world seems to be slowing down?

Our business in Europe market is still growing from a low base. So even if the economy is slowing down, we hope to grow the business by expanding our customer base in this region.

3. Dear Yvonne Ong, you wrote:

Have Chori, the second largest shareholder of MegaChem indicated any plans to take the Company private?

The Company has not been indicated, or informed, by Chori on this particular matter.

4. Dear Simon Lim, you wrote:

Does the Company have a dividend payout policy? Will the final dividend be cut too?

Even though we have no pre-defined dividend policy, we have been consistently paying dividend since IPO. The table below shows our dividend payment record since 2008. Except for 2008 when there was the US financial crisis, our dividend payout has been above 30%. In times of uncertainty, we will recalibrate the dividend payout but we hope to continue rewarding our shareholders for their continued confidence and support.

Dear Investors,

Thank you for all your questions and your interest in Megachem Limited. We have come to the end of this Q&A session.

We have enjoyed the session and have learnt much from your questions. We hope that through this Q&A, you have gained better insights to our Company and our operations.

Best Regards,
The Management Team
Megachem Limited